Testing models by replaying history

What happens when financial markets stop reacting to data and start reacting to narratives in real time?

In this episode, I'm joined by Wilson Chan, CEO and founder of Permutable AI, to explore how artificial intelligence is reshaping the way financial institutions interpret the world around them. Wilson brings a rare perspective, combining years of experience as a trader with a deep background in computer science, and it shows in the way he describes this shift.

We talk about how markets are moving away from traditional quant models and toward AI-native systems that can reason over vast amounts of unstructured global information. That includes everything from policy changes and geopolitical events to the subtle ways narratives form and spread across media.

What stood out to me in this conversation is how Wilson challenges the idea that markets are driven purely by fundamentals. Instead, he argues that perception and reality are increasingly intertwined.

If enough people believe a story, that belief can influence price movements just as much as financial performance. Permutable AI is built on this idea, scanning hundreds of thousands of articles in real time to identify how narratives evolve and impact commodities, energy markets, and currencies. It's a fascinating shift that raises important questions about how investors separate meaningful insight from noise.

We also explore the role of vertical LLMs and why generic AI models fall short in financial environments. Wilson explains how embedding financial relationships and ontology directly into models creates outputs that are structured, traceable, and ready for decision-making. That focus on explainability and auditability becomes even more important as AI systems take on greater responsibility. If something goes wrong, understanding why it happened is what maintains trust, and without that, adoption quickly stalls.

There's also a broader conversation here about where all of this is heading. From multi-agent systems replacing traditional analytics stacks to the ambition to build a full-world simulator for capital markets, it feels like we are at the early stages of something much bigger. But at the same time, Wilson is honest about the challenges, from integration hurdles to the human skills gap that continues to hold many organizations back.

So if markets are now shaped by narratives, AI reasoning, and real-time global signals, how should business leaders and investors rethink their decision-making in the future?